Portuguese cableco Zon Multimedia and mobile operator Optimus have agreed to merge, paving the way for the creation of a new challenger to leading incumbent Portugal Telecom.
The boards of the two telcos approved the merger. The new company will be…
Portuguese cableco Zon Multimedia and mobile operator Optimus have agreed to merge, paving the way for the creation of a new challenger to leading incumbent Portugal Telecom.
The boards of the two telcos approved the merger. The new company will be known as Zon Optimus and will generate revenues of €1.6bn and have a market share of around 26%.
According to a statement from the parties the merger will create synergies of up to €400m. The companies said the merger will give the new entity better access to capital markets and allow expansion into new markets.
“The scale obtained in Portugal, as well as the profitability increase that will result from the merger … will allow additional resources to be allocated to the implementation of a coherent and ambitious internationalisation strategy, which will be specially [focussed] on markets that show higher growth rates,” the companies said.
Alongside its Portuguese business, Zon also has MVNO and satellite TV operations in Angola and Mozambique, and the companies said they expect further international expansion to happen in this area.
Optimus’ board is being advised by BPI and Santander while Zon’s board was advised by Espírito Santo and Caixa BI.
Under the terms of the agreement Zon would absorb Optimus, with an exchange ratio that sees Zon corresponding to 150% of Optimus’ value. Pursuant to the merger, Zon will increase its share capital and then issue shareholders of Optimus new stock representing 40% of the share capital of Zon resulting from the aforementioned increase.
The merger was proposed in December by Optimus’ parent, Sonaecom, and Zon’s largest shareholder, Isabel Dos Santos.
Dos Santos – whose holdings are via Kento Holding Ltd and Jadeium BV – has increased her stake in Zon from around 10% to roughly 30% last year.
The merger between the number three wireless operator and the largest pay-TV company has been predicted for some time.
Advocates of the deal said this “consolidation scenario” had the most potential to enhance competition in the Portuguese market, which is dominated by incumbent Portugal Telecom and Vodafone.
